Nimon Zulu, CEO of Calabash Freight Limited, is looking to play his part in transforming rail operations in East, Central and Southern Africa through open access on the Dar es Salaam Railway Corridor.
He shared this vision with more than 500 participants from 42 countries and 158 companies at the recent International Forum devoted to the “Financing of Rail Projects in Africa”, held from 19 to 21 October 2023 in Diamniadio-Dakar.
Calabash Freight Limited, a rail logistics company, was established to cater to the growing need for freight solutions in Africa. Based in Zambia and Tanzania, Calabash has a local and international partnership structure with over three decades of rail freight experience on the African continent. Their expanded operations aim to cover TAZARA, ZRL, and SNCC networks, setting themselves up as a turnkey rail-based logistics and integrated intermodal solutions provider.
Nimon believes that open access as an innovative approach promises not only to enhance regional connectivity but also to drive economic growth, integration, and social development across the region. He highlighted the current state of rail operations in East, Central and Southern Africa, the concept of open access, and the potential benefits and challenges of implementing this model on the Dar es Salaam Railway Corridor.
East, Central and Southern Africa, home to a vast and diverse landscape, relies heavily on rail transportation as a crucial element of its infrastructure. Railways play a pivotal role in transporting goods and people, connecting landlocked countries to coastal ports and stimulating economic activities. However, rail operations in the region have faced numerous challenges, including inadequate investment, ageing infrastructure, insufficient rolling stock, and operational inefficiencies. These challenges have limited the railways’ ability to fulfil their full potential in fostering regional development. As of today, the railways can hardly handle 10% of the total available traffic on the Dar es Salaam Corridor.
One solution to these challenges is the concept of “Open Access”. Open Access is a railway policy model that promotes competition, efficiency, and investment by allowing multiple operators to access railway infrastructure and offer their services on the same network. It opens up the railway network to multiple, private operators who can supplement the efforts of the incumbent rail company. The involvement of multiple players encourages innovation and efficiency, leading to improved services and lower transportation costs.
“The potential benefits of Open Access on the Dar es Salaam Railway Corridor, which connects the Port of Dar es Salaam in Tanzania to landlocked countries like Zambia, Malawi, and the Democratic Republic of Congo, are significant,” says Nimon Zulu. “So far, our model has two private operators, and there are plans to engage more.”
In highlighting the potential of the Dar es Salaam Railway Corridor, Nimon notes that cargo volumes are expected to grow from Five million to eight million tons by 2030, once the expansion works at the port of Dar es Salaam have been completed.
“It is important to note that Zambia is landlocked but land-linked to multiple ports through transport corridors. In addition, TAZARA provides infrastructure links for SADC, COMESA and the EAC, which has a profound impact on 26 countries, 625 million people, and a $1 trillion total GDP,” explains Nimon.
Open Access will help alleviate congestion at the Port of Dar es Salaam by providing alternative routes for goods transportation, reducing the strain on the port and ensuring a more reliable flow of goods. This will become more evident as Open Access operators stabilize and strengthen their offerings.
However, as is being seen in South Africa, open access requires vertical separation between infrastructure ownership and train operators, along with a strong commitment from stakeholders to invest and provide the requisite regulations and policy frameworks from the government for successful implementation.
Developing a comprehensive regulatory framework that ensures fair competition, safety, and accountability will be crucial. Effective regulation will protect the interests of both railway operators and customers.
While Open Access encourages private investment, there must be a balance between private and public investment to ensure the railway network’s sustainability and expansion.
Different railway operators accessing the network must coordinate their operations and ensure interoperability. This will require standardised procedures and communication systems, addressing not only interoperability but also ensuring that operations are not limited by outdated technology, especially with the incoming Future Railway Mobile Communication System (FRMCS), which is set to officially replace GSM-R by 2030, and archaic train planning and scheduling solutions.
From a financing perspective, open access provides a platform for collaborative financing opportunities. These include opportunities for financial institutions to provide short-term financing, the involvement of private investors and equity funds for ownership stakes, thereby expanding the sector and access to cash flow. The promotion of collaborative Foreign Direct Investment (FDI) and joint venture initiatives to pool resources will lead to the modernization and expansion of the network, improving its overall capacity and safety.
“Calabash Freight’s short-term goal is to develop jointly with TAZARA and other operators on the TAZARA corridor, ensuring it becomes profitable, reliable, and efficient for our customers. The long-term goal is to replicate these successful operations in adjacent corridors, such as Angola and South Africa. Calabash recently commenced operations in the Democratic Republic of Congo and, despite it being early days, we look forward to growing this corridor and making it a success,” says Nimon Zulu.
In Zambia alone, there are several potential Public-Private Partnerships (PPPs) in the rail sector, which will unlock extensive upstream and downstream value for the country’s economy. These include the following as provided by the Government Inspector of Railways in Zambia, Mr Jordan Zimba:
- Lusaka Mass Transit Railway – Conceptual stage
- Kafue (Zambia) to Lion’s Den (Zimbabwe) Railway – 304 km from Lusaka to the port of Beira. Awaiting bid advertising
- Nseluka – Mpulungu Railway – 193 km spur to connect TAZARA from Nseluka to Mpulungu Harbour/Great Lakes. Awaiting bid advertising.
- Chipata-Petauke-Serenje Railway – 388 km spur to connect Zambia to the Port of Nacala in Mozambique. Conceptual stage
- Livingstone via Kazungula to Sesheke Railway – 193 km from Livingstone to Sesheke District and to connect to Botswana railway line and Namibia via the Kazungula Bridge. Conceptual Stage.
“To unlock the full potential of this concept, it will be essential for governments, railway operators, and international organizations to work together. The successful implementation of Open Access can serve as a model for other rail corridors across the region, providing a brighter future for East, Central and Southern Africa’s rail transportation and the economic development of the region as a whole,” concludes Nimon.